What is Blockchain?

A Virtual computer runs on top of networks of a physical computer that guarantees code will continue to operate as designed. e.g. Ethereum Virtual Machine (https://ethereum.org/en/developers/docs/evm/)

Layers: consensus > Blockchain > Application > User Interface

• Proof of work (to avoid Sybil attack): https://www.youtube.com/watch?v=3EUAcxhuoU4
• Proof of stake (ETH application)
• Vending Machine analogy (Smart contract)

Attributes:

1. Persistence

2. Consensus - all honest participants have the same data

3. Liveness - all participants can add new data

4. Open - anyone can participate

Why do we need Blockchain?

Much needed trust protocol for transfer of value online.

Double spending problem

Private keys

Bitcoin:

Scarce - 21M Time-bound mining limit - we have mined 18.6M

First implemented blockchain

Ethereum (Bitcoin but better) Smart contract - EVM ERC20 Tokens The fee will be paid in ETH (gas fee)

More use cases: Yield farming (Compound Finance)

Crypto in 2021:

Companies putting Bitcoin reserve to avoid -ve interest rates Scarce > high demand > high price

Slow transfer rate, energy issues, illegal usage

Dapps: Peepth, Web3